Property Market 2015

alastair

Greyian wrote: »

While the PPR has the peak as August 2014 nationwide or July 2014 for Dublin.

Except the the PPR, as they flag themselves, is "not intended as a property price index". The CSO's figures are. Peak sales of icecream might well be July, but that doesn't mean that the value of icecream decreases come the winter. Same logic applies to the PPR 'peak'.

Greyian

alastair wrote: »

Except the the PPR, as they flag themselves, is "not intended as a property price index". The CSO's figures are. Peak sales of icecream might well be July, but that doesn't mean that the value of icecream decreases come the winter. Same logic applies to the PPR 'peak'.

The PPR doesn't just measure the total value of sales in a month, so the ice cream analogy is a bit worthless.

The CSO only accounts for approximately half the market. While sampling 50% of the population would work extremely well for elections etc, that's because you get a sample from all the different demographics of the market. The CSO, however, only accounts for properties purchased involving mortgages, so it would be like asking women exclusively for an election poll, and then suggesting it will accurately model nationwide voting trends.

alastair

Greyian wrote: »

The PPR doesn't just measure the total value of sales in a month, so the ice cream analogy is a bit worthless.

What do they measure that you believe reflects anything to do with indexing prices? Given that they explicitly state that they don't apply any such measure, it would be foolhardy to ascribe any indexing value on what's essentially an arbitrary and incomplete collection of property sales. So the icecream analogy stands.

Greyian wrote: »

The CSO only accounts for approximately half the market. While sampling 50% of the population would work extremely well for elections etc, that's because you get a sample from all the different demographics of the market. The CSO, however, only accounts for properties purchased involving mortgages, so it would be like asking women exclusively for an election poll, and then suggesting it will accurately model nationwide voting trends.

If you're waiting for the perfect measure at the expense of the best available, then you'll be waiting a long time. The CSO stats are the best index we have, the PPR is not a price index.

gosplan

alastair wrote: »

'Fraid not. Not according to the CSO or the MyHome asking price report - Average Dublin asking prices rose 2.2% for the final quarter of 2014. A slower rise than the previous 6 months for sure, but certainly not a fall. If you don't buy into asking prices having any relevancy, then the CSO measure of paid prices puts Dublin prices at a 3.1% increase for Q4 2014. Again, that's a rise, not a fall.

The Central Bank flagged that they would be limiting lending ratios at the start of October, so while the specifics weren't known to prospective buyers, the intent was clear well before January.

I wouldn't really trust the myhome report tbh. Obviously, it can advise of price levels but I wouldn't trust it to give smaller trends, not least because it goes on asking prices which would always remain higher than market value for some time if things were trending downwards.

CSO is obviously more robust but still laggy. Tell me, what would you expect to see in Dublin stats in 3 months time?

alastair

I'd expect to see a small increase on Dublin prices over the entire year. Less than last year, on account of increased supply, and less urgency in general.

Cuddlesworth

alastair wrote: »

I'd expect to see a small increase on Dublin prices over the entire year. Less than last year, on account of increased supply, and less urgency in general.

I don't think Irish property prices have the ability to not swing wildly in either direction. Most buyers I have met don't are very persuaded by their perception of the market, not of the market itself.

Supercell

For what its worth, I just had my house valued by my bank as I am applying to go on a lower fixed rate and they want an up to date valuation on it.
The chap that was doing the valuation told me that he is definitely noticing less people attending open days this year than last year and he reckoned that the days of crazy price rises like in the last couple of years are over.
He reckoned there would be more smaller steady rises in the coming years due to pent up demand preventing another crash again. Sounded a bit like "soft landing" talk to me, read into what he said from the coalface what you will.

audi12

Supercell wrote: »

For what its worth, I just had my house valued by my bank as I am applying to go on a lower fixed rate and they want an up to date valuation on it.
The chap that was doing the valuation told me that he is definitely noticing less people attending open days this year than last year and he reckoned that the days of crazy price rises like in the last couple of years are over.
He reckoned there would be more smaller steady rises in the coming years due to pent up demand preventing another crash again. Sounded a bit like "soft landing" talk to me, read into what he said from the coalface what you will.

crash on the way only a fool would buy now

The_Conductor

Guys- we've debated the relative merits of the PPR and the CSO indices to death. The consensus is that historically- the PPR is significantly more accurate than the CSO- however, on any given day- the CSO will give a better picture than the PPR.

Both have their merits- depending on what you're looking for- however, they are not comparable- and trying to do so is a head wrecking exercise.

The CSO try to keep tabs on statisitically significant events (in this instance- sales of property, mortgage drawdowns etc). The PPR- is a complete census of the activity (of buying/selling houses)- however, its reported in arrears. Any single missing event should not impact the PPR massively- however, given the sampling nature of the CSO- it could potentially have a significantly magnified impact.

I think we've done enough crystal ball gazing here to be honest with you- aside from beating ourselves, and each other, up- we're not achieving anything.........

The_Conductor

audi12 wrote: »

crash on the way only a fool would buy now

Plenty of people can and will buy- it doesn't make them fools. People have different motivations for buying. The nominal value of the bricks and mortar and the roof over your head- are peripheral- for someone who needs a home, and is having difficulty finding suitable renting accommodation- to wait out an event that may, or may not, happen.

Suggesting purchasers in today's market are fools- is narrow minded and wholly ignorant of human nature. My motivations are different to yours- and yours are different to the next person walking down the street. Its human nature.

audi12

The_Conductor wrote: »

Plenty of people can and will buy- it doesn't make them fools. People have different motivations for buying. The nominal value of the bricks and mortar and the roof over your head- are peripheral- for someone who needs a home, and is having difficulty finding suitable renting accommodation- to wait out an event that may, or may not, happen.

Suggesting purchasers in today's market are fools- is narrow minded and wholly ignorant of human nature. My motivations are different to yours- and yours are different to the next person walking down the street. Its human nature.

fair enough but still not a good time to buy in general

Barely Hedged

audi12 wrote: »

crash on the way only a fool would buy now

What do you define as a crash and what percentage decrease do you believe we can expect?

What will be the big economic or any event for that matter that will cause this crash?

What will the comparisons and contrasts be with the last crash and this crash?

gaius c

alastair wrote: »

'Fraid not. Not according to the CSO or the MyHome asking price report - Average Dublin asking prices rose 2.2% for the final quarter of 2014. A slower rise than the previous 6 months for sure, but certainly not a fall. If you don't buy into asking prices having any relevancy, then the CSO measure of paid prices puts Dublin prices at a 3.1% increase for Q4 2014. Again, that's a rise, not a fall.

The Central Bank flagged that they would be limiting lending ratios at the start of October, so while the specifics weren't known to prospective buyers, the intent was clear well before January.

CSO exclude half the market (cash sales). PPR includes them and it shows a clear peak in Q3 2014 with a slow but steady decline since.

PPR lags because a sale closed in Q3 was sale agreed in Q2. That was the peak of the recent mania and the more observant EA's noticed that the fall off during the summer of 2014 was higher than normal because the market had simply moved ahead of buyer's ability (or willingness) to pay. Autumn 2014 was a serious wake up as the viewings started to get quieter and quieter and the price drops were already starting at least a month before the CB rules were announced.

gaius c

alastair wrote: »

Except the the PPR, as they flag themselves, is "not intended as a property price index". The CSO's figures are. Peak sales of icecream might well be July, but that doesn't mean that the value of icecream decreases come the winter. Same logic applies to the PPR 'peak'.

Another important thing you need to know about the CSO index is that it's reset every year so it's difficult to compare across calendar years.

alastair

gaius c wrote: »

CSO exclude half the market (cash sales). PPR includes them and it shows a clear peak in Q3 2014 with a slow but steady decline since.

PPR lags because a sale closed in Q3 was sale agreed in Q2. That was the peak of the recent mania and the more observant EA's noticed that the fall off during the summer of 2014 was higher than normal because the market had simply moved ahead of buyer's ability (or willingness) to pay. Autumn 2014 was a serious wake up as the viewings started to get quieter and quieter and the price drops were already starting at least a month before the CB rules were announced.

There's a peak there alright, but - again - that's not a price index. Refer to the icecream analogy.

alastair

audi12 wrote: »

crash on the way only a fool would buy now

I'm looking to buy now, but I'm also looking to sell. Not sure whether that makes me 'foolish' or not?

There's no crash on the way, in any case.

audi12

alastair wrote: »

I'm looking to buy now, but I'm also looking to sell. Not sure whether that makes me 'foolish' or not?

There's no crash on the way, in any case.

price reductions is a crash

Barely Hedged

audi12 wrote: »

price reductions is a crash

Price reductions are price reductions.

A crash is an uncontrollable event where no end is in sight to price drops.

As has been stated on this tread numerous times, over priced property is not selling, everything else is and in good time. How do you deduce a crash from that?

audi12

Barely Hedged wrote: »

Price reductions are price reductions.

A crash is an uncontrollable event where no end is in sight to price drops.

As has been stated on this tread numerous times, over priced property is not selling, everything else is and in good time. How do you deduce a crash from that?

There is always an end there is no difference between the two

Barely Hedged

audi12 wrote: »

There is always an end there is no difference between the two

I don't think you should be calling people fools if you believe that statement and if you've no answer for my original reply to you

audi12

Barely Hedged wrote: »

I don't think you should be calling people fools if you believe that statement and if you've no answer for my original reply to you

I wont be buying anytime soon for sure

Barely Hedged

audi12 wrote: »

I wont be buying anytime soon for sure

What do you define as a crash and what percentage decrease do you believe we can expect?

What will be the big economic or any event for that matter that will cause this crash?

What will the comparisons and contrasts be with the last crash and this crash?

audi12

Barely Hedged wrote: »

What do you define as a crash and what percentage decrease do you believe we can expect?

What will be the big economic or any event for that matter that will cause this crash?

What will the comparisons and contrasts be with the last crash and this crash?

Thats the same post as above

Barely Hedged

audi12 wrote: »

Thats the same post as above

Why don't you answer it?

I'd be interested to understand why you consider me to be a fool for pursuing a house purchase now given the questions I have asked?

audi12

Barely Hedged wrote: »

What do you define as a crash and what percentage decrease do you believe we can expect?

What will be the big economic or any event for that matter that will cause this crash?

What will the comparisons and contrasts be with the last crash and this crash?

False price rise on the back of homes shortage how about that for a start inflated prices that are not real once housing supply catches up a lot of average older stock will be left over that no one wants

gaius c

alastair wrote: »

There's a peak there alright, but - again - that's not a price index. Refer to the icecream analogy.

Ignore any evidence that doesn't fit your narrative. Your call.

slowjoe17

alastair wrote: »

There's a peak there alright, but - again - that's not a price index. Refer to the icecream analogy.

With your icecream analogy, you are considering market sales (volume).

The PRR graph shown is clearly showing average house prices.

The problems with the PRR might be inhomogenous data (eg apartments sell in one time period, and huge mansions in the next), but that also affects the CSO.

The problem with the PRR is lack freshness much more than lack of accuracy.

slowjoe17

alastair wrote: »

I'm looking to buy now, but I'm also looking to sell. Not sure whether that makes me 'foolish' or not?

There's no crash on the way, in any case.

You certainty is clearly wrong. There is a definite possibility of a crash.

Rising prices generates demand in a housing market. People worry about never being able to buy if prices rise too far. In a falling market, that demand doesn't exist, unless lack of information misleads people. The PPR means that much more information is available now than in the past.

Because rising prices generate support, a flat market is essentially impossible. Look into your crystal ball and call "boom" or "bust". "Holds steady" isn't economically possible.

alastair

gaius c wrote: »

Ignore any evidence that doesn't fit your narrative. Your call.

The problem is, it's no evidence of anything that impacts on the price index. See icecream analogy. Massive sales in August don't make for inflation in icecream value.

alastair

slowjoe17 wrote: »

With your icecream analogy, you are considering market sales (volume).

The PRR graph shown is clearly showing average house prices.

The problems with the PRR might be inhomogenous data (eg apartments sell in one time period, and huge mansions in the next), but that also affects the CSO.

The problem with the PRR is lack freshness much more than lack of accuracy.

It's not just the volume issue, it's, as you point out, inhomogeneous data. The monthly average is at the mercy of the nature of property that's sold that month, with no mechanism to ensure you're comparing like with like. At least the CSO do factor this into their stats.